Over the past several decades, a model has emerged that emphasizes the requirement for stimulatory cell-cell signaling in vertebrate germ layer formation. While a prominent role for inductive interactions remains unchallenged, experiments by our group and others have also established an essential role for germ layer suppression in establishing the vertebrate body plan. We have found that the Foxi-class protein Xema (Xenopus Ectodermally-expressed Mesendoderm Antagonist), expressed only in the ectoderm, is both necessary and sufficient for the suppression of inappropriate mesoderm and endoderm formation. Studies proposed in this Application are designed to elucidate the mechanisms underlying Xema-mediated germ layer suppression. Experiments described in Aim 1 will define the functional domains of the Xema protein and identify Xema-interacting proteins required for mesendoderm suppression. Studies proposed in Aim 2 will identify and characterize transcriptional targets that mediate Xema function in the early embryo. The experiments outlined in this proposal should extend, considerably, our understanding of ectopic germ layer suppression in the vertebrate embryo. This work will also be of significant interest to those in th discipline of regenerative medicine. In recent years, a great deal of attention has focused on the identification of sources of pluripotent stem cell populations, and on methods to encourage differentiation along defined lineages. Our data indicate that inactivation of Xema target genes are both necessary and sufficient for the development of extra-ectodermal fate, and suggest that much of the early vertebrate embryo can be directed to a mesendodermal fate by suppression of a transcriptional cassette. The studies proposed in this Application may thus inform efforts by other researchers seeking to generate pancreatic, cardiac, hematopoietic, and other mesodermal and endodermal lineages, in vitro.